Weekly round-up: Global, domestic base metal markets show diverging trends w-o-w, copper stocks surge 20%
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- Base metals on LME see mixed movements; Zinc posts largest gain, copper declines.
At the close of trading on Friday, 9 August 2024, base metals on the London Metal Exchange (LME) exhibited mixed trends. Zinc recorded the largest gain, rising by 3.13%, while copper saw the steepest decline, falling by 2.09%.
On the LME, three-month aluminium futures rose by 1.7% to $2,301/t, and nickel prices settled at $16,150/t. Copper prices were at $8,866/t, zinc increased to $2,736/t, and lead edged up by 0.74% to $2,038/t.
This week, the domestic and global base metals markets experienced varied trends. Notably, imported aluminium prices declined by 1.7%, while copper and lead also saw downward corrections.
Although base metal prices declined w-o-w, they rebounded by the end of the week in local markets, supported by a recovery in futures prices. Market participants gained confidence, but trade activities remained subdued, likely due to the upcoming holidays next week. Despite lower trade volumes, local prices responded positively to the upward movement in the futures market.
Aluminium
India has observed a decline in imported aluminium scrap prices this week, influenced by range-bound LME prices. Prices for all grades have decreased by up to 1.6%, creating market uncertainty and prompting a cautious stance among participants.
According to BigMint's assessment, prices for tense scrap from the Middle East, particularly the UAE, fell by $30/t, settling at $1,700/t. Zorba 95/5 from the UK also decreased by $15/t to $1,960/t CFR West Coast, India.
Monthly settlement prices for aluminium ADC12 (automobile OEM approved) were recorded at INR 219,000/t ex-Delhi, down INR 2,000/t m-o-m, as per BigMint's assessment. In Chennai, prices were INR 218,000/t, a decrease of INR 1,000/t m-o-m. However, bids are reported to be INR 3,000-4,000/t lower than the settled prices.
In the domestic market, tense scrap prices remained stable in both Delhi and Chennai. BigMint's assessment indicates domestic tense scrap prices at INR 174,000/t ex-Delhi NCR and INR 175,000/t ex-Chennai.
Copper
Domestic copper armature scrap prices have decreased to INR 722,000/t ex-Delhi. On the London Metal Exchange (LME), copper prices dropped by $200/t to $8,880/t d-o-d. Secondary copper rod prices were reported at INR 767,000/t.
In the imported segment, brass honey 2% from Australia was noted at 61% LME, while USA copper motors mix was reported at $1,100-1,150/t CFR Mundra. LME copper futures recently hit a 4-month low, falling to $8,750/t levels.
Zinc and lead
India's domestic zinc prices have remained stable, while lead prices fell by 2% w-o-w. Zinc prices held steady with minor fluctuations at INR 260,000/t, reflecting a 2% drop in Hindustan Zinc Ltd (HZL) prices and a 3% decline in LME zinc prices. Conversely, domestic remelted lead prices in Delhi dropped by 2% to INR 184,000/t. Middle East zinc diecast prices were reported at $2,060/t CFR Mundra.
Despite the stability in the Indian domestic market, LME zinc prices increased due to a reduced global surplus and weaker U.S. job growth. Physical zinc inventories fell by 7.5%, while China's refined zinc production in June rose by 1.81% m-o-m but decreased by 1.2% y-o-y. Supply concerns continue, particularly with MMG Ltd halting operations at the Dugald River mine.
China market
In the week ending 9 August 2024, deliverable stocks of base metals in Shanghai Futures Exchange (SHFE)-registered warehouses displayed mixed trends. Notably, lead saw a significant inflow, increasing by over 14% w-o-w to reach 39,401 t, according to the exchange's weekly stocks report.
Global updates:
- U.S. copper scrap exports:
In June 2024, U.S. copper scrap exports decreased by 19.44% m-o-m, falling to 68,228 t from 84,714 t in May. However, for the first half of 2024, exports increased by 13.47% y-o-y, reaching 476,043 t compared to 419,526 t in the same period of 2023.
- Japan's aluminium demand:
Japan's aluminium demand fell by 4.7% to 882,500 t in first quarter of calendar year 2024 (Q1CY24). Domestic demand dropped by 4.1%, and exports saw a decline of 17.8%, reflecting reduced activity in the transportation and construction sectors.
- China's aluminium market:
China's aluminium exports decreased by 3.77% in July, while imports rose by 14% y-o-y. SHFE aluminium prices increased by 8% compared to July 2023, reflecting ongoing market dynamics.
